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Friday, 26 May 2017

Iran and Turkey vow to boost bilateral trade and deepen cooperation

BEIRUT, LEBANON (5:17 P.M.) – The Iranian President Hassan Rouhani and the Turkish President Tayip Erdogan, agreed on a plan to deepen the bilateral cooperation and boost their trade volume. The two Presidents held a conversation via phone in which the ambitious goal of reaching a 30 billion USD annual trade volume was proposed by Rouhani.

He told Erdogan, that “over the past four years big steps have been taken to deepen Iran-Turkey ties, but a leap must be made […] toward reaching an annual trade volume of $30 billion”. Furthermore he called for more cooperation in the banking sector.

Erdogan agreed with these goals, mentioning that he saw no obstacles for the deepening of bilateral ties. This is not the first time for the trade partners set out this target. In June 2016 the Turkish trade Minister Bulent Tufenkci stated, “my country has serious plans to triple trade with Iran to 30 billion.”

Despite Iran already being sanctioned, the trade volume with Turkey reached 20 billion in 2012, but drastically dropped, after harsher sanctions were implemented the same year. The sanctions excluded, financial institutions and banks implicated in Iran’s oil trade from the SWIFT bankig system, which was the only system to enable transactions between banks until 2015.

As big parts of the sanctions were gradually lifted due to the nuclear agreement reached in 2015, the bilateral trade volume had already halved to only 10 billion, but was set to rise fast again. But despite an additional trade agreement with a wide array of 300 tariff cuts, the trade volume diminished furher by 100 million the next year, as can be seen in the graphic below:

Nevertheless a lot seems to have changed recently and the Turkish Economy Minister Nihat Zeybekci could announce March this year, that the trade volume is now increasing by 30% each month.

This development reflects improved relations between the two countries, which despite supporting opposite warring parties in the Syrian conflict, have recently agreed together with Russia on plans to implement de-escalation zones in Syria, which could prove as a first step, for ending the now 6 year long conflict.

In the talk with Rouhani Erdogan emphasized the importance of this political agreement, reached May 4 this year in the Astana talks. Further details and steps for the concrete implementation of the de-escalation zones in Syria are to be set out in a new round of talks early in June.

The conflicts in Iraq and Syria, threaten state control in the region. Both Turkey and Iran had securtiy issues in their border regions, close to these two conflict zones, especially with kurdish groups. Territorial control by the various groups in Iraq and Syria is shown in the map below: